Title: The equity refinancing preference and market timing in Chinese listed firms

Authors: Hui Huang, Wanjun Zhang

Addresses: School of Management, Huazhong University of Science and Technology, Wuhan, Hubei, 430074, China. ' School of Accounting, Chongqing Technology and Business University, Chongqing, 400067, China

Abstract: According to the sample data selected on the equity refinancing of the total market and the individual listed firms in China, we find that the total stock market refinancing amount has a significantly positive relationships with the Market-to-Book ratio (M/B) of stock market; and whether equity refinancing or not, as well as the proportion of equity refinancing are significantly negative related to the variation ratio of next annual M/B for individual listed firms. These results show that there exists the market timing choice of equity refinancing in Chinese listed firms, resulting a lower equity capital cost and the equity refinancing preference.

Keywords: equity refinancing preferences; market timing choice; Chinese listed firms; China; stock market refinancing; market-to-book ratio.

DOI: 10.1504/IJCG.2008.020630

International Journal of Corporate Governance, 2008 Vol.1 No.2, pp.185 - 196

Published online: 05 Oct 2008 *

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